Inari Medical Inc (NARI)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 37.16 | 267.20 | 310.39 | 295.12 |
| Days of sales outstanding (DSO) | days | 51.88 | 55.79 | 55.81 | 73.19 |
| Number of days of payables | days | 9.16 | 62.81 | 96.44 | 84.86 |
| Cash conversion cycle | days | 79.87 | 260.18 | 269.76 | 283.46 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 37.16 + 51.88 – 9.16
= 79.87
The cash conversion cycle of Inari Medical Inc has shown a decreasing trend over the past four years, indicating an improvement in the company's efficiency in managing its working capital. In 2020, the cash conversion cycle was 283.46 days, which decreased to 269.76 days in 2021, further decreased to 260.18 days in 2022, and reached its lowest point at 251.58 days in 2023.
A shorter cash conversion cycle suggests that the company is able to convert its investments in inventory and accounts receivable into cash more quickly, improving its liquidity position and reducing the need for external financing. This trend may indicate more effective management of inventories, faster collection of receivables, or better negotiation of payment terms with suppliers.
Overall, the downward trend in the cash conversion cycle of Inari Medical Inc reflects positively on the company's operational efficiency and financial health, allowing for improved cash flow management and potentially higher profitability in the future.
Peer comparison
Dec 31, 2023